The Government of the Republic of Serbia has rendered a Conclusion by which it gave consent for additional direct payments to be paid to commercial entities and to approve the postponement of payments of certain public revenues, under certain conditions.
In this respect, it is necessary to distinguish four types of entities regulated by the Conclusion:
1) Commercial entities that are not large legal entities and which have exercised the right to direct payment in accordance with the Decree on Fiscal Benefits and Direct Payment to Commercial Entities in the Private Sector and Financial Assistance to Citizens in order to Mitigate the Economic Consequences of Covid-19 disease (“Official Herald of RS”, no. 54/2020 and 60/2020) (“Decree”) and paid to them in July;
2) large legal entities that were entitled to direct payments in accordance with the Decree and did not lose that right;
3) Commercial entities that met the requirements of the Decree, but do not belong to the previous two types (for example, economic entities that were entitled to measures in accordance with the Decree, but did not accept them);
4) Commercial entities that have been established and registered or have acquired the status of VAT payers (i.e. natural persons who have the status of entrepreneur another person) after 15 March and ending on 20 July 2020.
The distinction between the above types is significant both in terms of exercising the right to direct payments and in terms of the right to defer the maturity of public revenues.
1) Direct payments to economic entities
Commercial entities that are not large legal entities and which have exercised the right to direct payments in accordance with the Decree and to which direct payments were paid in July will receive non-refundable payment of funds in the amount of 60% of direct payments paid to them in July 2020 in two months. This category of commercial entities realizes the right for additional direct payment without the obligation to take any action, but for the deferral of maturity of taxes and contributions for salaries have the obligation to submit a tax return on Form PPP-PD for August, where field 1.4. – should designate the date of payment as 5 January 2021.
Large legal entities that were entitled to direct payments in accordance with the Decree and did not lose that right are entitled to additional direct payments provided that they submit the SL Form for June and July 2020 by 15 August 2020 at the latest. The number of employees stated in the SL Forms for June and July is multiplied by the amount of 50% of the minimum salary for March 2020, which amounts to RSD 15,183.52. The first payment of direct payments will be made in August, and the second in September 2020.
The third type of commercial entities is entitled to direct payments in the amount of 120% of the basic minimum net salary for March 2020 (RSD 36,440.45 in total) per employee, provided that no later than 15 September 2020, submit the Form PPP-PD for August, where in field 1.4. – the date of payment is entered as 5 January 2021. It is important to keep in mind that only one application is submitted with the payment date defined as 5 January 2021 and one payment will be made in the above designated amount.
Newly established commercial entities are entitled to direct payments in the amount of 120% of the minimum net salary (RSD 36,440.45) per employee and are divided into two groups, as follows:
a) commercial entities that have employees, i.e. submit the PPP-PD Form – this group submits the application for August no later than 15 September 2020, with the payment date defined as 5 January 5, 2021; and
b) commercial entities that do not submit Form PPP-PD (lump sum taxed entrepreneur, entrepreneur other person, as well as entrepreneur and entrepreneur farmer who have not decided on personal earnings, which means that they do not submit an individual tax return) – this group does not submit Form PPP- PD rather exercises the right to direct payments automatically.
Payment of direct payments is made to a special purpose account – COVID-19 with the bank that maintains the current account of commercial entity in question. In that regard, to commercial entities that have opened special dedicated accounts – COVID-19 payments of direct payments are made to those accounts, and to those that do not have opened special purpose accounts – COVID-19, accounts will be opened in order to realize payment of direct payments in accordance with the Conclusion (accounts will be opened either in the only bank in which they have an account or the Tax Authorities will choose the bank in which the account will be opened).
It is important to keep in mind that the received direct payments should be used no later than 31 October 2020, and the funds that are not used will be transferred back to the state.
2) Deferring the maturity of certain public revenues
The conclusion envisages postponing the maturity for the payment of public revenues, only for one month, as follows:
- taxes and contributions on salaries and wage compensations;
- taxes and contributions on personal earnings of entrepreneurs;
- taxes on income from self-employment.
Please note that there is no additional delay in the advance payment of corporate income tax.
Taxes and contributions on salaries, salary compensations and personal earnings paid by commercial entities that submitted the PPP-PD Form for August 2020 with the entered payment date of 5 January 2021, are due for payment on 5 January 2021.
In the case of lump sum taxed entrepreneurs who have exercised the right to direct payments in accordance with the Decree and which were paid to them in July, the advance payment of income tax from self-employment, which is due for payment in August 2020 is postponed until 5 January 2021.
In the case of other lump sum taxed entrepreneurs (those who were entitled to direct payments from the Decree but have not used them and newly registered lump sum taxed entrepreneurs in the period from 15 March 15 to 20 July 2020), the advance which is due for payment in September 2020 is postponed until 5 January 2021.
In case of entrepreneurs (except lump sum taxed) who have exercised the right to direct payments in accordance with the Decree and which was paid to them in July, the advance payment of self-employment which is due in August 2020 is postponed until the day of submission of the final tax return and contributions to income from self-employment for 2020 (i.e. no later than 15 April 2021).
In the case of other entrepreneurs, except for lump sum taxed entrepreneurs that were entitled to direct payment from the Decree but have not used them or newly registered lump sum entrepreneurs in the period from 15 March to 20 July 2020, the advance payment of tax on income from self-employment due in September 2020 is postponed until the day of submission of the final tax return for taxes and contributions to income from self-employment for 2020 (i.e. no later than April 15, 2021).
3) Loss of the right to use measures
A commercial entity loses the right to use the measures from the Conclusion if it reduces the number of employees by more than 10%, not counting employees who concluded a definite-term employment contract with the commercial entity before 15 March 2020 in the period from 15 March 2020 until the expiration of three months from the last payment of new direct payments in accordance with the Conclusion. In other words, the deadline for maintaining the number of employees is being extended since payments are expected to be made by the end of September.